Saturday, 22 October 2011

Utility Costs and Scams

Further to the Watchdog programme on Thursday night I thought the following email, which I received some weeks ago from John Souter, would be of interest.

The other day I had a thought on the costs and scams of the utilities and it occured to me it was diffecult to isolate and properly evaluate what these costs actually are.

For instance i believe these comparison sites are part of the scam - when you go on to them they always ask who you are already with and the amount you are charged/consume. They then come up with unqualified alternatives and non specific claims that by moving you 'could' save hundred per year.

They never quote specifics such as the cost per kilowatt - hour Electric day time is 15.189 pence/ Night 4.250 and Kilowatt - hour for Gas is 3.404. As it happens that is exactly what I'm charged by my supplier Utility Warehouse,but if I ask these comparison sites how these rate against the charges of the suppliers they recommend and will supposedly save me hundreds i get a deafening silence. And if I ring the recommended supplier direct the usual response is to baffle with bullshit such as direct debit payments/ amount of consumption/ fixed contracts ad nuaseum.

Another issue is the calculation of gas is subject to a fluctuating Volume Conversion Factor and Calorific Value/ we are told they exist and are subject to temprture and pressure conditions which we're told is calculated and applied as an oncost by the National Grid, but as individuals we have no way of knowing whether their effect on Cheshire is any different to say those in Perth?

We could be paying a stealth tax in these manipulations. If we can establish these factors cover comprehensively the UK it will simplify the comparison of individual supplier charges.

John suggested it would be interesting to see if VCF (Volume Conversion Figure) and CV (Calorific Value) varies throughout the UK which will allow simple and direct comparisons on suppliers.

I can add that in this part of Scotland we are restricted to suppliers so are therefore at a disadvantage before we begin price comparisons.

As Alex Salmond said in his speech at the SNP conference today:"We live in a land rich in oil and gas and with the prospective of being the leading renewable energy country in Europe, of not the world, yet we can't afford to help those who are unable to heat their homes." It's a disgrace and all due to the Westminster government privatising utilities. As he mentioned, thankfully Scotland's water is still in our government's hands.

17
comments:

… which all goes to prove, that for your average punter the various tariffs and offers are far too confusing; and that for a majority of the disabled, pensioners and frail elderly the options are overly complicated to the point of being incomprehensible.

So to UK governments, be they based at Westminster or Holyrood, I would say – fine words come cheap – the time has come to see some positive action towards actually alleviating fuel poverty within sectors of our society, rather than just making token gestures to salve a guilty political conscience.

Gas Meters measure Volume flow. The volume of gas supplied is converted to "Standard Conditions of Temperature & Pressure" to have a consistent base. Because gas is, by definition, compressed to 'push' it along the pipe, the Shipper corrects this to normal atmospheric pressure.

Likewise, gas during transmission is cooler than ambient. Because it's cooler, a standard 'volume' contains more heat content. Once again a correction factor is applied.

There is a 3rd factor. Altitude correction. Natural Gas is lighter than air, so the higher-up a consumer is, the greater the effect. Altitude correction reduces about 0.5%. Altitude correction is generally in 'bands' of probably about 50m - it'd be impractical to have an exact Altitude Factor for every premises.

The net result of those 3 x Factors is that the heat supplied in a Standard Cubic Metre or Std Cu Ft (i.e. what you pay for) is to add about +2.5% to the volume as measured by the meter.

To assuage the natural scepticism of SR's readers, when Temp & Pressure correction was introduced (From Memory - mid 1990's) Ofgas required suppliers to reduce energy unit prices by the same amount to ensure bills are not increased.

http://www.prnewswire.co.uk/cgi/news/release?id=51151

Incidentally, it's not an 'oncost' as JS mentions, it's an accurate calculation the principle of which does apply equally in Cheshire or Perth. What does vary is the cv; but then the cv changes over time, too.

""As Alex Salmond said in his speech at the SNP conference today:"We live in a land rich in oil and gas and with the prospective of being the leading renewable energy country in Europe, of not the world""

Erm...Confusion? Oil and Gas and Renewables? Climate Control? Why only help for poor and needy? Why not cheaper energy for all? Don't politicians make you want to puke?

SR @ 01:25"It still doesn't answer why my friends in Norwich pay nearly a third less than me (for a bigger house) yet they know their supply comes from Scotland."

Two points Rosie.

1. Are they paying less because they buy less? [Eg if their house is insulated to newish standards, it'll use far less than an older house insulated to the standards in force at the time of its construction.]

2. Are they paying a lower Commodity Charge (p/kWh)?

The latter is undoubtedly because (a majority of) the gas comes not from Scotland, but via the Continental InterConnector - some of it from as far away as Russia via the Ukraine.

Some of us English are closer, so Transportation Costs are less! [Similarly, those in Cornwall pay a higher Transportation Cost than your Norfolk friends.]

When Salmond said:"We live in a land rich in oil and gas ...." I suspect there should then be a comma, to separate "...... with the prospect of being the leading renewable energy country".

However, whilst Scotland might have plenty of wind to feed the windmills, it doesn't do as well as Spain for free Solar, does it. ;-)

You ask "Why not cheaper energy for all?"

The answer is that it's happening. However, "the all" now includes the billions in BRIC -Brazil, Russia, India & China who until very recently, couldn't afford much power. It's an international market - sold to the highest bidder.

Like Rosa I'm aware energy prices vary throughout districts and regions. Whether they should or not is another question - however my intent was to see if, with the consent of our gracious host, if a worthwhile side-bar could be set up where posters could disclose the area they live, their supplier, type of account etc., and the amount their supplier charges in his unit rates.

If it can be done it would at least give an honest comparison for anybody searching for the best rates in a given area or, if they're so inclined to question their supplier why his rates are higher than the rates of other areas.

From a (thankfully short) experience with Scottish Power I found it difficult to extract the unit charges from their bills.

For me it seems power to the people is just as distorted in its presentation as is power from the people.